the key thing is to find out who are those people. a systematic watching of live television, something kids are good at, can -- you will find who are the people who speak most about the subject you want, and within three weeks of watching, you can come up with i am noticing these people coming up, and they are influencing debate. you probably want to engage those guys. they will be important to you. and so i think it is listen to look at who is out there, and come up with who are those people who are important. it is not just one guy at the top. >> george washington university. you make a strong case for looking at public diplomacy in the field and for the most part look at the state department's role in the field. you have also served in large type for embassies where there are a variety of departments and agencies of the u.s. government,

and in india you have a strategic dialogue that involves different agencies. could you reflect on who does public diplomacy in the field, in addition to the state department, and what is the state department's role in leveraging those actors? >> one thing i can think of is usaid. in india it is huge. it varies. they are influencing the public debate out there. they have a public role. it has been different with what the state department is. they coordinate in everything they do, so you hope there is a unified message, that they are key communicators overseas. there are other agencies like health and human services can be one, cdc, there is all these people doing things. you want to capture the good things they are doing and expect why it is important what they're doing and chose the partnership between united states and other branches of government. it is not strict diplomacy, but other things that are going on. it is important people see that.

in my report i focus on the state department because we have the lead role, but there are a lot of others that support the efforts and do a lot to support public diplomacy. >> good morning. from the bureau of middle east north africa affairs at the state department. walter and i work together. walter, i would love to hear your comments on how you approach issues of religious faith and tolerance, both in saudi arabia and in pakistan, and some of the creative programs that i know you did in saudi arabia would be of interest. what i am sure he is about is how you avoided an inflammatory exchange or engagement, but rather kept it more at a level of mutual understanding and of interest in the issue on both sides. >> yeah. religion is a fascinating one. i speak in my report, i think we

have to realize the establishment clause is not to avoid religion, to appoint a specific religion, and it is an effective way to engage people. i think of someone who can to saudi arabia when i was there who was jewish and his father had recently died. in the jewish faith you read every days certain passages from the torah to honor your father. when he mentioned that to the saudis, they loved that. he was open about what he was doing religiously and they respected that. we have to be open about that. it is something that is important for them. there is much more religion in their daily debate than you might hand here. we cannot shy away from that, but rather embrace it as something that is worthwhile, and one thing -- explaining that the united states is religious. that is always surprising to

audiences. a journalist in boston, said he had 10 churches within a few blocks in boston, and he never realized americans were so religious. i think that is something that is a barrier and breeds a lack of trust in who we are, because religion is so important to them, and what they see coming out of america does not portray that as much as that is part of our lives. i think at state we have to embrace that. not proselytize, i'm not saying that, but be open that we are religious and believe that, too, because it opens a lot of doors for you when you speak about that. >> the other piece is when american religious figures to things that are polarizing in the middle east or seem to be disrespectful.

is there anything other than to explain that nobody speaks for the government and we have a big messy democracy? >> we do that a lot. [laughter] there are a couple of well-publicized cases recently in which we need to engage on that and try to explain the first amendment. the first amendment is a tough one, because most countries do not have it. we are it. there are a lot more research and even in western europe and what you can say that in the united states. it is a hard concept get across because those people can use that and can get a lot of press, even though they have a very small following in the united states. while you can talk about the first amendment, you need to explain that these are not mainstream people, that what they are saying is not something that a lot of americans are people -- picking up more what

americans feel. certain ones do. the best defense is to be as open as you can about it, try to explain it, and in some ways that the message fall flat for the united states and say what effect does this have on what we do? often the proof is it has very little effect on us. but we are constantly dealing with those guys. it is troublesome. but we have to explain this is our society and how we do it, but look at the results. >> do they throw back at us the same thing of all the people who are nursing terrorism, you throw us all in the same basket? >> yes, we hear constantly how varied muslims are, and in the field you appreciate that. muslims are like you and me. they just want a middle-class life, get their kids educated and all that. a lot of them recognize the problem they have got. in pakistan, a senior official i became friends with used to say

america, do not abandon us, you are our best hope. it is not a message you hear back here often, but something that is felt there. when right after we killed bin laden i was there and i was talking to the driver, and he was from abbottabad, and i said, have you ever seen the house? he said, i have not, but my family is going by now, everybody is looking at it. he said, i am glad you got that i because last august my brother-in-law was in a market when a bomb went off. he was buying something. he was killed. so my sister and her three daughters, children, do not have a father, and she has moved back in with us. these guys caused a lot of trouble here, and i'm glad you did what you did. it is a message you do not hear back your as much. on a daily basis when you're out there, you hear that a lot, and these are people who try to

distinguish themselves from the stereotypes of what muslims are like and speaking from the heart. you cannot be helped but affected by that. the troublemakers out there -- sure, there are, and they do not like it any more than we do. >> thank you. a question all the way in the back. >> thank you. my name is lynn, and i have overlapped with walter professionally. later, during his last days, i worked with him. now i met the broadcasting board of governors where the governing board has an opportunity to change the emphases and focuses on the agency overtime in the wake of 9/11, for example, creating the middle east broadcasting network and others. i wondered, if he would like to address how personalities and changing emphases of the undersecretaries over time may have affected how the muslim majority countries are perched, either to the way the united

states' actions, to public programs that have been launched or relaunched over time. >> that can be a minefield. i can speak about the one i work for, judith mchale, and her approach was different, and one that i think still lives on today in a way that i very much like. that is when usia merged with the state in 1999, it was not a complete merger, and a lot of the function having to do with planning did not follow. she had been hit with discovery and realize the importance of bring that in, and she did a good job of giving ace tool of

should you just planning. this was 10 years after the merger. it is invaluable. i think more work needs to be done, but i think this planning -- we have limited resources, and the more you can plan what is important to not spend your money and resources on personnel and all that, on what is unimportant, that that makes a huge difference. one of the most difficult things about that position is how much it has been vacant, and matt armstrong has written about it in his blog about how the position has been vacated 1/3 of its existence. that hurts public policy. we would like to have public best people in there and emphasizing what we can do and putting resources and giving some direction to what we do. >> why do you think it has been at the so long? >> an interesting question. a lot of people who want to do it, i would think, and when i have spoken to that, they enjoyed it.

something like james glassman said he had a great time and wished he could do more. my sense is that it is harder -- they have looked out generally at -- they do not use career people there, so to find the right person who is out there who they think can do the job -- meaning the state department -- it takes a little more time perhaps then something else. but probably every case is separate, individual-wise. judith came in quickly when obama came in. they moved quickly to bring her in as fast as the confirmation process would allow. i am not sure why on an individual basis the others took so long. i wish it were not like that. >> hi, walter. i wonder if you can describe some of the ways in which your program in saudi arabia tried to foster civil society. >> ok.

well, i was here in 2006, 2007, when we had fought back bitter terrorist attacks earlier. the saudis have done a lot for it. we had a view of what the united states works, that there were some things that they could see that would be worth borrowing. and part of that was just exposing people to the united states in a way they never had before. it was everything from using muslim-americans in mecca to talk about things like how we deal with health problems, to a photo exhibit where we worked with "national geographic," and with that photo exhibit we could go to places where americans

traditionally did not go. we partnered with the saudi ministry of culture -- judith. hoping when people saw that some of the extremists there would say maybe america is not all that bad and that maybe this lack of america is not something these extremists would say that would get us the mileage, that there is another side to make them hesitate and say not all americans are bad. i look right in front of you at a person who was with me in saudi arabia who was innovative in going out and working with a lot of these communities where american embassy people have not been before. and she was a wonderful asset to have us. the exposure to an american like that could talk to them about who they were. there was another project out there that i greatly admired, and that was a breast cancer project, tying up the komen foundation with a foundation

with in texas, and breast cancer is a harmful problem there. tying komen with the treatment of the center was a wonderful project, where wonderful came together, fully supported by men, and i thought it was just a brilliant program to sort of show how you can tackle this problem in what you might say civil society in a very fine way, using us as an example, because we do that. we tie the awareness together with the treatment. stuff like that i think had a lot of impact, and judging from saudis you speak to, the attention it got, any attention from them tells you are on to something there. >> can you say more about gender? there is a presumption that foreign policy is a men's game. i know from what i know of your programming that, like with susan komen, you were reaching out to all kinds of audiences, as the united states thinks

about engaging broadly, and we know that women play roles in families, determining who takes place in boycotts, how should we think about engaging women as the distinct, women in foreign policy? >> you have to engage women on both levels as professionals, foreign policies -- they fit those opinion leader positions because while there might be fewer, they are out there who have an impact. watch lebanese tv is to see all those announcers and reporters who are women and realize that nbc has broadcast broadly in the mideast and they are certainly -- you're going to engage -- >> because so many of the presenters are so attractive. >> whatever it takes. they are presenting news and points of view, and you want to work with them on those very

serious hard-core political issues. but i think dan in looking at how you engage a larger grouping, you have to find what is important to them, and make sure the things we are talking about are important to them. for example, if you talk about glass ceilings in corporations or something and things like that, that is important for a very small group. it is important, but not a broad-based effort. what you have to do is look at something that perhaps does have a larger impact on women and look at the education, gender-based violence, all these other things that really hit a broader society, and maybe share some of our ideas and really share, not about lecturing ordering anything like that, show what we do and see whether they can borrow something that might fit with their society.

you cannot impose this on them. they will work at their own speed and at their own time to do it, but exposing them to some of our better practices cannot hurt. you might find they are seeing us do some things that are not right, so they might look at some aspects of our society, where tv shows show licentiousness in america, and you have to put those in context of what they are. their television shows and not reality, and you have to deal friendly with these issues, because i found sometimes these make a greatest barriers to understanding the united states and anything else, is they see that portrait of america, whether it is accurate or not, and generally it is not accurate, saying i do not like it, and you say there's more to america than what you see on the shows. >> reality tv is not reality?

>> "jerry springer" -- but another program speaks to real women's issues. they should see a little bit less jerry springer. >> retired from the u.s. council for international business, and i am looking at that paragraph called "the private sector." you said a free conversation with harvard executives might be an inexpensive alternative. if i am a head of the ibm office of mumbai and my job is to make ibm grow a seamless operation, what should i do? do i want to get engaged in this, and it is like walking on egg shells? to what extent can u.s. global companies play a positive role without cracking the egg shells? >> sure. it is interesting because we work with us. if you take something like microsoft, you have every interest in intellectual property rights that we do and they are very vocal about it. they bring people together, send

them off of in training programs to the united states. they do a lot of things like that. i love companies that are augmenting what we are doing work on, limiting what we do for their own reasons, but they happen to hit a lot of our ideas read one thing i was mentioning about that, what i thought was interesting, i saw this in pakistan, we put out with aid a contract to ad agencies, and i was part of the committee to choose one, and i found that -- and i had been in advertising so i could read to the mumbo-jumbo -- and what was interesting is when you have an ad agency talk about what works, you're not getting the guy to think about you are one thing, this is some guy with 20 five years of experience selling products there, and has a good sense of how this stuff works. one thing that came through in a love these contracts was that do

not use sms. that is spam. my time in washington -- use sms. who are you going to believe? these ad agencies returned to move her, have a good sense of what did work and what cannot. we can also learn from the failures -- i mentioned and mcdonald's campaign here that was covered in "the new york times," but the social media backfired on them and it turned out to be something different. we can learn from what these companies do. my final conclusion -- it is funny because i do go back to india and i talk to a guy at an ad agency -- what are we surprised about how you communicate in india? there's a lot of experience we can tap into that. we tend not to be so good going with the private sector on that,

but they have a lot of experience on this and can tell us a lot. >> we have time for one more question right there, sir. >> thank you very much. the british embassy. i feel i need to ask a question to show that we are here and we are listening. [laughter] i wanted to ask about the balance between efforts in washington and efforts in country, where you are blessed with huge numbers of foreign journalists. what extent can you use them to influence the message that you are receiving in country, and what are the things are the best experiences you have heard of that happening? >> what is the last part? >> good examples of engagement of the foreign media here to influence. >> ok. we regularly engaged in foreign journalists that are there, and we do it with the americans out of courtesy because they are

fellow americans because we're there to help out. but also one thing is interesting is how what they write can boomerang back into the society. the fact is when i was in pakistan i saw what i covered was covered there, and so it is important to make sure they are giving a perspective for what is going on. they engage with an awful lot of people in whatever host country they are in, and so by the questions they ask, you learn a lot about a country when we have chats with them. one of the difficult things is they have difficulty getting access to a lot of these places. some countries that do, some do not, some throw them out, some have minders. it is not something -- you cannot use them everywhere all the time. they are just not around. you will always have a wire reporter because it is often a

local, but get a newspaper guy in there is different. in pakistan, we were spoiled because every major media organization had a representative there. in india i can say, although it outside the scope of the report, new delhi is a huge hub for international journalists. wherever we are, we like them. we use them. it is important to mitigate them when they ask us questions. they are not our target. they are not the guys we are out there to reach. it is what we do in addition to reaching out to whatever the host country is. i think that is always something to be aware of. for us a real success is when we see a story that appears in the middle east press or al jazeera, something we have worked with them on, more than if something were to appear on bbc. once again i get back to that for an accurate, trust and all

that, that certain organizations, we will or wrote deeper and have a broader audience than others. we want to make clear who we are trying to work with the most here. >> walter, i want to thank you for presenting not only a fascinating report, but also a broad-ranging discussion that the ministries how rich the field of public diplomacy is. i want to thank you for coming. we look forward to seeing you again soon. thank you. >> thank you. thanks, john. [ applause ] >> tomorrow, former middle east advisor to president obama and clinton, dennis ross, will have a discussion on national security on foreign policy challenges. the new america foundation will begin the discussion that begins at 12:15 eastern live here on c-span. on c-span 2, a deal reached with

iran the past weekend in geneva switzerland over the country's nuclear program. that's live from the heritage foundation at noon eastern. >> now, former treasury secretary larry summers on the outlook for the u.s. economy. he was interviewed last week in "the wall street journal" ceo council meeting. this is 35 minutes. >> larry summers on the deficit and economic growth. this is 35 minutes. >> it is my great honor and privilege to be here with larry summers. when he was two years old his parents took him to his pediatrician who happened to be my father. according to larry's father, a story he told, his parents expressed concern that larry was

not talking much at two years old. supposedly my father's response was i would not worry about it once he starts. he will never stop. so with that. >> moving right along. asked if we had been able to post questions i would have asked you but i will ask for a show of hands. if you had to pick the top priority, the single top economic rarity for the u.s. government right now and they give you a choice between reducing the long-term deficit and doing something to spur growth in the short-term and the long-term, deficit or growth, you only get one vote. how many people would choose the

deficit over growth? how many people would choose rose over the deficit? i have been here watching for 30 years. for much of that time we have been obsessed with reducing the deficit. that has been true in the last few years. you think that is a dumb idea and so do a lot of people here. why? >> guys are right. -- you guys are right. they are wrong. you guys are not getting your way. we have had 10 bipartisan budget processes, we have zero bipartisan growth processes. we have had budget some is -- summits up the union. we have -- somehow, the business immunity was complicit because they have been substantial financial supporters and encouragers of it. we have gotten the idea that addressing the deficit is the

defining challenge facing the country. there are three relevant realities. on the current forecast the debt to gdp ratio will improve of the -- over the next decade. the debt forecast online with the way they looked in terms of decline after the 1993 budget deal. for 10 years this problem is at hand. second, basing policies on these forecasts is longer than that is kind of a crazy thing to do. if you take the confidence interval around the deficit forecast, not 20 years out, not a 95% confidence interval but five years out, a 90% confidence interval, that confidence interval is 10%. it is plus or minus 5%. if the geomet climate change people were telling us it was

negative three degrees to plus 6 degrees we would not be acting on the problem and we do not know what the long room -- run deficit will be. the most important thing is if you take the longest run deficit, you take the official forecast of it, if we increase the growth rate by point two of 1%, point two of 1% to my you solve the entire identified fiscal gap problem. i'm here to tell you that in a country that is stifling entrepreneurship in a variety of ways to my in a country that is star for public investment that lets canidae airport languish the way we do, in a country that is missing a huge opportunity on immigration reform, and a country that is maintaining a

regulatory and tax environment that does not recognize the confidence is -- that confidence is the cheapest form of stimulus, increasing the growth rate is easily attainable. the truth is that if we get past our current perhaps protracted bout with secular stagnation and get the growth rate up, that it -- the debt bubble will stay in control. and if we continue to the a country that does not increase the fraction of adults that are working mother does not catch up with its gdp potential, that grows at two percent or less what we can have all the entitlement summits in the world and we are gradually going to accumulate debt and have a serious debt problem and so we just have gotten our focus to the wrong thing. we should be focusing on growth. growth creates a virtual circle

which creates more growth. employers work harder to train the next generation of workers. in a growing economy, there are more ladders for kids to get on which puts them in a better position to lead 10 years down the road. there is more profit that can be reinvested in r&d and long-term capacity. the growing u.s. capacity, there is a stronger world economy which is ugly to be a successful world. -- world economy. this is where our priorities should be and we have just in my view, it is sad to say, lost track of it as a country. >> why is it wrong to say that we know we have an aging society, we know we have some benefit promises that are going to be expensive to keep, and what he not be prudent to do something about growth and package that with things that we know take a long time to save money and do it now rather than

bequeathing the problem? >> there were some real problems in the kitchen on the titanic. there were. they were the wrong problems to be working on given the challenges the titanic faced and given that management had only some much attention that he could vote itself to. it is the same thing. it would be better to be thinking about a range of long-term adjustments about 2035. it would be. we really cannot do very much. we had difficulty passing any legislation. in that context the right focus is on what is most important. things that contribute to growth. what is surely necessary is things that contribute to growth. i think that the odds are we're going to need to make entitlement adjustments at given the uncertainties in the forecast, these forecasts are wrong by five percent of gdp all the time. they were wrong on the high side. the forecasts were to

pessimistic in the 1990s, they were wrong on the low side, they were too optimistic in this period. when people are talking about entitlement reform, they are talking big numbers. they're talking about one percent of gdp. 1.5% of gdp. it is the right thing to be thinking about. one thing a group like this camera member. it is the right thing to be doing. if you contribute the absolute maximum you are legally allowed to every year from the time your 19 to the time you are 65, your social security benefit is less than $40,000. and so there may be a case that we need to adjust the formula in various ways. how excited can you really be

about the central national project being adding this benefits for the best of the social security recipients from 38,000 dollars to $36,000 rather than figuring out a way to grow the economy faster so there can be more benefits for everybody? the right debate to be having is not the debate about containing the budget. it is about how best to spur growth. >> used rather frightening phrase about secular stagnation. do you mean that we are at substantial risk of having an economy that perks along at two percent growth and has one in six men between 25 and 54 on the sidelines of the labor market for years to come?

>> i am not predicting it. i do not see how you can look at the data and not say that debt -- and that is a substantial risk. there are two points. four years ago right now, financial repair had happened. the tarp money had been repaid. credit spreads had largely normalized. there was no panic in the air. with respect to thinking institutions. it has been for years. we have not grown the share of adults who are working in the united states all since that time. we have not gained at all on the potential of the economy. and so the growth machine we predicted, the forecasters have been consistent. absolutely consistent. a return to accelerated rate of growth nine months from now. there has been the forecast for the last four years and he has always been wrong.

it might be right this time. we studio to be right but i do not see how you could be certain that it is right. and if you look at, there is a troubling feature it seems to me, the experience before this crisis and that is what has caused me to be more alarmed. think about the years between 2004 in 2007. we had what consensus opinions think were excessive budget deficits. we had what consensus opinion now thinks were excessively easy monetary policies. we had what universally is regarded as having been a massive commit him prudent, and excessive credit expansion. we had what is regarded as having been an inordinate housing bubble which created a false impression of wealth and

created vast and excessive construction. you might think that with all those things going we would have an economy that would be overheated. but if you look at the unemployment statistics, if you look at the inflation statistics, if you look at the growth statistics, the economy was bubbling. there were bubbles, all right but the underlying real economy with a huge support to demand for all of that was not overheating. by any stretch of the imagination. and so it has now been a decade since we have grown at a rapid rate in a remotely healthy and sustainable way. and that commit seems to me, has to be the deep concern as you look to the next decade. things happen. when i came into the clinton administration in 1993, we did a

comprehensive exercise and the treasury was part of it, the fed was part of it, the imf was part of it. we asked all the outside forecasters. looking to the long run, there was a debate. there were pessimists who thought japan would grow by three percent a year -- 3% a year over the eight years and they were optimists who thought it would grow by 4% a year over the succeeding 20 years. it has grown by about .6% a year. over the succeeding 23 years and so gdp is only slightly more than half today of what we universally believed then because permanent stagnation was kind of inconceivable. in japan, what happened was growth was very slow and growth

was slow and after a while, everyone got used to it and they stopped calling it a demand cap and they started saying it was all that could be done and to some extent, that became true because after all those years, the companies do not reinvest month the company's lost the mojo, they were not in the position to compete so at a certain point, supply came down to demand. and he got used to the idea that japan was a different kind of growing country. i am not saying we would have a gap but we are already defining our aspirations as measured by potential gdp way down. so if you ask is there a risk of this emma absolutely.

does the risk, does the prospect seem as likely or more likely, then the high optimism scenario where we go back to an era of 4% growth? between the pessimistic scenario and the hyper-optimistic scenario, i would choose the pessimistic scenario. things have a way of working out. my guess is it will be better than that. the thing that policymakers should be accessing about is the risk of this secular stagnation thing. that is a much more urgent threat to every american interest than anything about social security benefits in 2035. that is a much greater risk to american interests than anything about the emergence of hyper-inflation coming from monetary policies. that is where the concern not to be. the gap between winners and losers in our society is wide by

historical measures and has been widening. should we worry about that and if so, what should we do about it? >> we should be worrying about it. if the only thing that was happening was that, i would argue that we should be worrying about it but i would understand why other people would feel that is what the market was doing and you should not make that either preoccupation. but here is what is really scary. for 240 years since george washington, and has always been true that we became a country with more equal opportunity every generation. that is no longer true. in the united states. the gap in life prospects between the children of the rich and the children of the poor has widened over the last 40 years. the gap in the college attendance rates between the children of the rich and the children of the poor has widened

over the last 40 years. it is not that we do not know how to make progress. if you look at the achievement gap between black and white students, that achievement gap in 1970 was twice as large as the gap tween the children of the rich and the children of the poor. you look today, the achievement gap between the children of the rich and the children of the poor was twice the gap between lex and whites. so we know how to make problems. with 40 years of effort we have a long way to go. we have made enormous progress. with respect to civil rights. if the problem is the color line in the 20th century, the home of the 21st century is the class divide and what it means for opportunity. and so widening income distribution combined with more

and more ways in which the fortunate can advantage their children, i think is profoundly corrosive. what is it that should be done? we need to find ways to ensure that the educational opportunities open to every kid are like the educational opportunities open to the kids of the people in this room and we are not close to that as a country. we need to make sure that we're there are slots to be given, whether it is the government giving rights to spectrum or mining rights are whatever it is, that had those processes are open and inclusive and open to everyone and are not processes that reward the fortunate, i

have written a lot of papers about the important incentive effect of taxation. i believe that we cannot punitively taxing we cannot go back to the kind of tax rates the country had in the 1950's in the 1960's and the 1970's. i am here to tell you that there are a substantial set of loopholes, special interest privileges, and the like that distort the allocation of resources, make the economy

function less well and also act to reify and reinforce any -- inequality and that serious tax reform that went after those inequities could both make a fairer economy and make an economy -- >> corporate taxes are something people care about. what would you do if you could write the corporate tax thing, how would you handle the question of overseas earnings, what is the right way to do this for the economy and the social good? >> and d me and him -- indulge me if you will in an analogy. you have a library in the library has a lot of overdue books. you could have an amnesty where people got to bring back their books and they did not have to pay the fine. that would make sense. another thing you could do is you could say, we're never going to have an amnesty. you had better bring back your

books because no matter how long you keep your books you're not going to get an amnesty. that would be kind of harsher but that would make sense, too. a really idiotic thing to do would be to put a sign on the door of the library saying, no amnesty now but stay tuned come a there might be one next month. that would be the dumbest imaginable thing to do. what has been the u.s. corporate tax debate for the last five years? it has been exactly that. no break on repatriation now. the constant hope that there may be a break on repatriation in the not too feet -- distant future and so why would anyone ring back their money in the face of that? what should we do? i think the principle is clear. you could call it territorial with a minimum. a lot of different things you

could call it. we should eliminate the distinction between repatriated profits and non-repatriated profits. we should establish in a balanced budget way a minimum tax on global income. and so whether the rate would be in the neighborhood of 15%, you pay that, if you brought your money back, you would pay that, if you left your money in ireland, and there would be no longer an incentive to keep money offshore. if you did it right, there would no longer be -- there would not be any revenue loss to the government. but look, there are things we need to fix to stimulate investment in the country. but i do not know that much about multinational business but here is something i think i do know. if you measured it right, the places abroad where the american companies make the most profits

would be places like china, japan, terminate, and france. that have -- germany, and france that have a good economies. if you look at their tax returns, the places to show up having the largest profits are places like the netherlands, and ireland, in case you're not getting it, the kaylynn -- the cayman islands. it really should not be that way. it does not need to be that way and it is not really making the country more competitive or creating jobs to have it be that way. so, the principle is, do not try to raise more money, but try to raise money in a better way and do not keep a set of uncertainties that all but forces everybody to leave their money abroad. >> i could keep going but if you have a question. ok. healthcare.gov is a disaster. how much damage has that done to trust in the government to do

anything? >> we will see. it cannot be good. [laughter] look, this is an unhappy tale. many of you know from your own experiences that the right general rule on large i.t. projects is, take what they say, double it, and then move to the next higher unit of time. so days become weeks and weeks become months. i could continue the sequence. that is true when it is done in the private sector. and there is no organized constituency for failure. and when it was done in the public sector there was a massive organized constituency for failure that organized as best it could to ring about failure by starving the funds and objecting to the procedures and so on. it was next-door nearly

difficult task -- extraordinarily difficult task that was massively underestimated and i do not think there is any legitimate excuse for how badly it was underestimated. i think you have to say, if you look at the capacity of government to do things, you have to be less optimistic about that than you were today. and i think it is a huge imperative to do something that will give confidence and as i wrote a few days ago, the great danger at a moment like this: the great wager for a football team that is down by two touchdowns -- and danger for a football team that is down by two touchdowns in the third quarter is that they will abandon their playbook and start throwing hail marys in every direction. the great danger at a moment like this a -- is you will have

promise that she will promise days when you have great results and make confident claims about what will happen next, you will try to jury rig something rather than recognizing that given the that of the hole you're in, it will be difficult. this is going to take -- as difficult as this was to do it right in the first place, it is going to be more difficult to fix. but i think it is hugely important that it be fixed. at the same time, i do think that we do need a kind of compact in this country where we debate things a we debate things and we debate things, and when we come to a conclusion,

everyone tries to make them work, and if they do not work, at a certain point, we draw lessons from that. those who try to bring about failure and then say we saw failure, therefore we cannot rely on government, i do not think they are performing in a way that they should be proud of either. i do not think there is anybody in washington who is emerging as a winner from how this appears. i do think that if i may say so, those of you, who i suspect is majority of people in this room, are of a more conservative and then i, -- bent than i, recognize that of the strategies that could happen pursuit that would result in universal health care, the one that was pursued was the one that was most respectful of the traditional market, that went with a grain of the current system, was the

one that was closest to what had been proposed by republican think tanks like the heritage foundation and implement it -- implemented by conservative state administrations. and so if it does not -- if this kind of commendation -- combination of government operating at the edge rather than taking over the whole system is too difficult to make work, that -- there are conclusions from that could -- that could be drawn in both directions, but my hope and my expectation would be that this will, over time, be fixed and made right. and i think it is worth

remembering, just as a general matter, having lived around washington things for quite some time. it was only two months ago, less than two months ago that the budget deal and the budget and the fact that the republicans were face down on the debt issues meant that they could have been seen as being in deep n-terminal difficulties and that now is completely out of everyone's mind and no one remembers that as an important event all of six weeks later. and so it is a great mistake to think that whatever the mood is right now, that that is the mood three months are now, let alone three years from now. there is a larger universe of possibility. ask you mentioned japan, slow growth, more than a decade, two decades. abe comes in with an approach of three arrows.

we see one of the aeros fired, maybe the second one is in the quiver, the third is not out of the talking shop yet. i wonder what your evaluation of that economic policy is and the likelihood of success. >> it is a little bit like pulling your goalie and a hockey game. it is not that great a strategy. it is just if you do not pulled the goalie out and the clock runs out, then you lose for sure. and the -- so you have to try something new. so the basic thrust of a substantial commitment to expansion was the right one. i think there have been some encouraging signs so far in increasing growth expectations, and the reduction and deflation

and expectations. the prospects for japan looked considerably better than they did a year ago. that is a tribute to the policies. i do not think we will now -- know until nine months from now. they will put the value added tax in and either the economy will have weathered that and the growing -- continue to be growing in a reasonable way, or as it happened in the past, there will be a run-up of gross until they do that, and then there will be an air pocket of spending afterwards and they will be back in the soup and i cannot confidently predict between those two possibilities. both i think are real possibilities. >> a question from one of the

ceo's here. >> you talked about the secular challenges to long-term growth. could you talk about the role of labor in society? it feels like the combination of globalization, automation, we had a wonderful discussion at lunch that said even at the university level there will be increasing pressures on traditional jobs, maybe not at the top universities but at many others. it seems that if you are at the top, today's world offers more opportunity to contribute globally and if you're not, the pressures for middle-class jobs and other things are just enormous. do you see an underlying trend here and what do you think it means in terms of long-term growth and the inequities in society that you described? >> if the issues that i called secular stagnation around lack of demand and all that are the

issue for the next decade, the issue for the next half-century is the issue that you raised. there were some guys who wrote a book nine years ago about technology and its impact on employment. one of the most striking passages was they said, computers can do some things, but computers are not going to be able to do other things. their example, something that computers would not be able to do was make a left turn against ongoing traffic. google nailed that one within less than a decade. if you -- one of the things i have done since leaving government was spend a bunch of time out in silicon valley. and the set of things for which they are developing capacities to do is mind-boggling. it has always been true before that people, jobs were eliminated in one sector by productivity increase and they

went to somewhere else. and the people thought he could not happen. that is true with respect to agriculture, that is true to -- with respect to the luddites, it has always been true before. the fact that it has been true before does not mean it was always true before. house prices in america always wind up. it has always been true before is not a conclusive argument. i think our chances are maximized if our educational system is repairing as many people as possible to be as creative and flexible as possible. i think we are going to have to recognize that in a world where the potential rewards and leverage to the most creative are larger, that we are going to

have to find ways of having some redistribution from the most creative to everyone else. the example i like to give is george eastman had some fantastic ideas about photography. he was very successful, and along with his success, the city of rochester supported a thriving middle class for two generations. steve jobs, equally fundamental innovation or more fundamental innovations, produced even greater success for him, and for his shareholders, but there was no comparable, large-scale, middle-class job creation.